The United States and Iran have reached a tentative peace agreement aimed at reopening the Strait of Hormuz and restoring oil flows through the critical waterway. The deal, expected to be signed in Geneva on Friday, was confirmed by Iran’s deputy foreign minister on state television, though he noted it will not take effect until the formal signing. The agreement follows months of heightened geopolitical tensions that have influenced commodities markets, especially oil and gold.

Gold, traditionally viewed as a safe-haven asset during periods of instability, had seen its appeal diminish over the last three months amid rising real interest rates and a strong U.S. dollar, both factors linked to the ongoing conflict. Inflation pressures, exacerbated by elevated oil prices, have fueled speculations of upcoming U.S. Federal Reserve rate hikes this fall.

With the conflict’s potential resolution, analysts are considering two plausible scenarios for gold prices and their implications for major gold mining stocks listed on the Toronto Stock Exchange (TSX). A recent fundamental valuation analysis was carried out on the top 11 gold mining companies by market capitalization on the TSX, using discounted cash flow models, price comparables, and adjusted book value metrics to assess whether these stocks are undervalued or overvalued relative to their current prices.

In the first scenario, if the cease-fire and associated peace deal hold, fundamental drivers for gold remain supportive. These include ongoing central bank purchases, a softer U.S. dollar, continued concerns about sovereign debt levels, and expectations for future interest rate cuts. Data from the World Gold Council indicates strong demand in the first quarter of 2026, with central banks acquiring 244 tonnes of gold and exchange-traded funds maintaining positive inflows despite high prices. Under these conditions, gold prices are expected to rise, although near-term pressures from inflation and potential rate increases present challenges.

Conversely, if the peace deal unravels, oil supplies through the Persian Gulf could face renewed disruption, driving prices higher. The agreement stipulates a 60-day window to resume nuclear negotiations, contingent on the U.S. releasing $12 billion in frozen Iranian funds—a point where the U.S. and Iran reportedly disagree. Additionally, Israel has stated it does not consider itself bound by the deal. Should the agreement collapse, gold prices could retreat, potentially falling back to around $4,000 per ounce or even dipping to $3,500 amid inflationary pressures, interest rate hikes, and technical selling. However, gold is expected to find a support level in this range as economic slowdown and eventual rate cuts come into play.

Among the companies analyzed, Agnico Eagle Mines Ltd., with operations across Canada, Mexico, Finland, and Australia, is projected to produce between 3 million and 3.5 million ounces of gold in 2026. The company is advancing development at its Hope Bay project in Nunavut with an approved initial capital investment of $2.4 billion, aiming to deliver 400,000 to 435,000 ounces annually starting in 2030. Agnico Eagle also renewed its common share buyback program, planning to repurchase 25 million shares over the next year.

Lundin Gold Inc. recently monetized part of its silver production from the Fruta del Norte mine by establishing a separate royalty investment vehicle, Lunr Royalties. In exchange for future silver production rights, Lundin received approximately 50.5 million Lunr shares valued at around $670 million, which it distributed directly to shareholders rather than as a cash dividend.

Notably, Newmont Corp. was voluntarily delisted from the TSX in September 2025, removing one of the largest gold producers from the Canadian exchange.

Investors should be aware of the risks inherent in commodity and equity markets. Fundamental valuation tools offer insight but cannot guarantee performance.